September 2017

September 29, 2017

The Consumer Financial Protection Bureau is issuing a final rule that amends Reg. B, which implements the Equal Credit Opportunity Act, to permit creditors additional flexibility in complying with Reg. B in order to facilitate compliance with Reg. C, which implements the Home Mortgage Disclosure Act. The final rule also adds certain model forms and removes others from Reg. B and makes various other amendments to Reg. B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.

September 27, 2017

The Consumer Financial Protection Bureau has issued a report entitled "Financial well-being in America," which presents results from the National Financial Well-Being Survey, conducted in late 2016. The findings include the distribution of financial well-being scores for the overall adult population and for selected subgroups, which show that there is wide variation in how people feel about their financial well-being.

The report provides insight into which subgroups are faring relatively well and which ones are facing greater financial challenges, and it identifies opportunities to improve the financial well-being of significant portions of the U.S. adult population through practice and research.

According to a CFPB press release, the Bureau has also released an interactive online tool allowing consumers to measure their level of financial well-being.

September 26, 2017

The Treasury Department is proposing to extend, without change, an existing information collection entitled "TARP Capital Purchase Program--Executive Compensation." It has also announced that it will submit the proposal to the Office of Management and Budget for review and clearance.

The collection is related to executive compensation and corporate governance standards to which certain entities receiving financial assistance from Treasury under the Troubled Asset Relief Program are subject. Comments should be received by Oct. 27, 2017.

September 25, 2017

As students head back to college, the Consumer Financial Protection Bureau is advising students to be on the lookout for "official" college accounts that are attached to a campus ID or are marketed using the college's logo. According to a Bureau blog post, just because a bank, credit union, or other account provider pays a college for the right to market an account with its mascot, logo, or name, it doesn't always mean that it's the best deal for students. Students should first evaluate whether the bank account is safe and affordable.

Students should particularly be aware of costly fees and risky features that can lead students to pay more than they expect. These fees can include out-of-network ATM fees, balance inquiry fees, monthly maintenance fees, or overdraft fees typically around $34 per transaction. Research has shown that even small financial shocks--a few hundred dollars--can cause significant financial hardship for many students, and even deter some students from completing their degree.

September 21, 2017

The mission of the Consumer Financial Protection Bureau is to ensure compliance with federal consumer financial laws through effective enforcement. When the Office of Enforcement needs to gather information, it may issue a Civil Investigative Demand (CID) to people and institutions that may have materials relevant to an investigation. A CID recipient may challenge the demand by petitioning the CFPB's director. The director can reaffirm the decision to obtain the information, modify the demand, or set it aside altogether.

The CFPB has granted in part and denied in part the petition of Synchrony Financial to set aside or modify its CID. The Bureau modified the CID's Notification of Purpose but found that none of Synchrony Financial's arguments merited setting aside or otherwise modifying the CID.

The CFPB has denied the petition by Heartland Campus Solutions, ECSI, for an order to set aside or modify its CID because the Bureau determined that Heartland ECSI's objections were without merit. The Bureau also denied a request by Heartland ECSI for confidential treatment of its petition and related materials, finding that Heartland ECSI failed to demonstrate good cause for omitting these materials from the public record.

September 20, 2017

Republican staff on the House Financial Services Committee have released a second interim majority staff report on the committee's investigation into the Wells Fargo fraudulent accounts scandal and the Consumer Financial Protection Bureau's enforcement action on the matter. According to the report, an internal CFPB "Recommendation Memorandum" for Director Richard Cordray--improperly withheld from the committee for over a year--reveals the Bureau failed to fully and adequately investigate Wells Fargo. Instead, the report claims, the Bureau rushed to settle with Wells Fargo for less than 1 percent of the Bureau's own estimate of the bank's statutory civil monetary penalty.

In addition, the report says that as with the first interim majority staff report which was issued in June 2017, the committee remains unable to complete its investigation because Director Cordray remains in default of the committee's April 2017 subpoena seeking relevant records.

September 19, 2017

The Consumer Financial Protection Bureau has issued a small entity compliance guide for its Arbitration Agreements Rule, which was issued in July 2017 and governs agreements providing for arbitration of future disputes between consumers and providers of specified covered consumer financial products and services. The rule prohibits providers from relying on pre-dispute arbitration agreements to block class actions concerning consumer financial products and services covered by the rule.

The rule was effective Sept. 18, 2017, and compliance with the rule is required with regard to pre-dispute arbitration agreements entered into on or after March 19, 2018. According to the CFPB, the purpose of the guide is to provide an easy-to-use summary of the Arbitration Agreements Rule and to highlight information that may be helpful when implementing the rule.

September 15, 2017

The Consumer Financial Protection Bureau has issued a no-action letter to a company that uses alternative data in making credit and pricing decisions. Under the letter, the company, Upstart Network, Inc., must regularly report lending and compliance information to the CFPB to mitigate risk to consumers and aid the Bureau's understanding of the real-world impact of alternative data on lending decision-making. According to the CFPB's press release, the no-action letter signifies that the Bureau currently has no intent to initiate supervisory or enforcement actions against Upstart.

September 14, 2017

The Consumer Financial Protection Bureau has filed an amicus brief in the case of Regions Bank v. Legal Outsource PA, et al. This case involves claims under the Equal Credit Opportunity Act against a bank that allegedly required a business owner's spouse to guaranty a loan to the business because the business owner was married. The Bureau's amicus brief argued that the district court erred in rejecting claims by the business and various guarantors of the loan.

First, the brief argued that a business entity can state a claim for ECOA discrimination based on its owner's marital status. Second, the brief argued that regulations issued pursuant to ECOA reasonably interpret the term "applicant" to encompass guarantors such that non-borrowers who are required to guarantee their spouses' loans can state claims for marital-status discrimination.

September 13, 2017

Representatives Sean Duffy (R-Wis) and Gwen Moore (D-Wis) have introduced the Business of Insurance Regulatory Reform Act, which would limit the jurisdiction of the Consumer Financial Protection Bureau in regulating the insurance business. According to Duffy's press release, the CFPB is prohibited under the Consumer Financial Protection Act from regulating the "business of insurance," but the Bureau has nevertheless "demonstrated an interest in insurance products and has pushed the boundaries of its own authority by regulating products that fall under the purview of state insurance regulators."